Avalere Analysis: Medicaid Managed Care Enrollment Set to Grow by 13.5 Million

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Published

Oct 23, 2014

A new analysis from Avalere Health projects that enrollment of Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries in managed care – i.e., state payment of private companies to provide benefits – will increase by 13.5 million individuals from 2013 to 2016.

In total, managed care enrollment will increase from 67 percent of total Medicaid and CHIP enrollees in 2013 to 76 percent in 2016.

The findings come on the heels of the recent announcement by the Centers for Medicare & Medicaid Services (CMS) that 8.7 million more people have enrolled in Medicaid as a result of the Affordable Care Act (ACA). The growth is attributable to states’ decisions to expand the program, as well as the indirect effects of people learning about and enrolling in programs for which they were previously eligible (sometimes called “the woodwork effect”).

“Medicaid managed care offers states the opportunity to deliver coordinated care to Medicaid beneficiaries at a defined cost,” said Caroline Pearson, vice president at Avalere Health. “As a result, the projected growth in Medicaid managed care enrollment is driven by not only expansions under the ACA, but also state decisions to expand managed care programs to all or most of their existing beneficiaries.”

In addition, Avalere found that enrollment in Medicaid managed care is particularly high in states that decided to expand Medicaid – both because these states relied on managed care more heavily before ACA expansion and because newly eligible beneficiaries are largely enrolling in managed care plans. Specifically, among states expanding Medicaid, the percentage of enrollees in managed care exceeds the national average – rising from 73 percent in 2013 to 79 percent in 2016 (10.2 million).

Of the 28 states and the District of Columbia committed to expansion, 16 states and D.C. plan to enroll over 90 percent of new eligibles into Medicaid managed care. “The vast majority of people who have insurance as a result of the Affordable Care Act are enrolled in private plans,” said Dan Mendelson, CEO of Avalere Health. “This is a major business opportunity for plans, and often also helps to promote continuity of care as low income people migrate between Medicaid and subsidized exchange coverage.”